NATIONAL HOUSING Act

Arrangement of Sections

1. Short title.

2. Housing objects.

3. Housing powers.

PART I

National Housing Fund

4. Establishment of National Housing Fund.

5. Administration and accounts of National Housing Fund.

6. Loans for purposes of National Housing Fund.

7. Payments into and out of the National Housing Fund.

PART II

Administrative Arrangements

8. Appointment of Commissioner for National Housing.

9. Appointment of Deputy Commissioners and Assistant Commissioners for National Housing and staff.

PART III

Building Societies

10. Formation of building societies.

11. Approval of instrument of association of a building society.

12. Requirements of instrument of association of a building society.

13. Registration of instrument of association.

14. Effect of registration.

15. Conclusiveness of certificate of incorporation.

16. Alteration of instrument of association.

17. Appeals to Minister.

18. Copies of instrument of association to be given to members.

19. Definition of member of a building society.

20. Contracts.

21. Bills of exchange and promissory notes.

22. Persons authorised to act in behalf of a building society.

23. Execution of deeds abroad.

24. Receipts when valid.

25. Company law not to apply to building societies unless so applied by Order of the Minister.

25A. Power of Commissioner to direct the Board of Directors of a building society to summon a meeting of that society.

25B. Power of Commissioner to call for information and to inspect books, registers and other documents of a building society.

25C. Power of Commissioner to inquire into the affairs of a building society.

25D. Power to impound documents.

25E. Powers of Commissioner to dissolve a building society.

25F. Power of Commissioner to remove from office a member of the Board of Directors of a building society.

26. Application of Part IX of this Act to loans granted by building societies.

PART IV

Housing Bodies

27. Declaration of housing bodies.

28. Power of housing bodies to carry out certain housing objects.

Building Companies

29. Declaration of building companies.

30. Powers of building companies to carry out housing objects.

PART V

Recovery of Possession of Houses by the Commissioner, Building Companies, Building Societies, and Housing Bodies

31. Houses to which this Part applies, and interpretation of the expressions "landlord” and "occupier”.

32. Obligation to vacate houses to which this Part applies.

33. Application to court for recovery of possession and service of rule nisi.

34. Adjournment of hearing.

35. Issue and execution of writ for delivery of possession.

36. Appeals.

37. Provisions of this Act to apply exclusively in all actions for ejectment from houses to which this Part applies.

38. Costs, charges and stamp duties.

39. Forms.

40. Exclusion of application of section 22 of Rent Act.

PART VI

Carrying out of Housing objects by the Commissioner

41. Commissioner may carry out housing objects for the Government.

42. Commissioner may carry out housing objects with the consent of the owners of land.

43. Costs of Commissioner in carrying out any housing object under section 42.

PART VII

Financial Assistance by Government for Carrying out Housing Objects

44. Power of Commissioner from National Housing Fund.

45. Applications for loans.

45A. Permission of Commissioner required in certain circumstances for alienation of security for a loan granted from the National Housing Fund.

45B. In certain circumstances security for a loan from the National Housing Fund not to be seized or sold in execution of a decree which is not in favour of the Commissioner.

45C. Security for a loan from the National Housing Fund not to be alienated to a person who is not a citizen of Sri Lanka.

46. Government guarantee in respect of loans.

47. Priority of charge created by loan granted by commissioner.

48. Application of Part IX of this Act to loans granted by the commissioner.

PART VIII

Compulsory Acquisition of Land for Carrying out Housing Objects and of Certain Premises and Disposition of State Land

49. Compulsory acquisition of land.

49A. Acquisition of certain premises under the Land Acquisition Act.

50. Disposition of State land.

51. Reservation of minerals.

52. Covenants and conditions to run with the land.

53. Reversion of title to the State.

54. Cancellation of instruments of disposition of State land.

55. Notice to be issued to party in occupation to vacate land.

56. Ejectment where occupant fails to vacate land.

57. No legal claim for compensation to be founded on cancellation of instrument of disposition.

58. Dispositions executed by grantee.

59. Rectification of errors in instruments of disposition.

60. Authentication of copies of instruments of disposition.

60A. Recovery of possession of State land possessed under an agreement with the Commissioner.

61. Definition of "appropriate authority”.

62. Expenses of disposition of State land.

PART IX

Provisions which may be made Applicable to Loans

63. Application of this Part and interpretation of expression "appropriate authority”.

64. Power of appropriate authority to investigate purpose to which loan is applied.

64A. Power of appropriate authority to cancel the grant of a loan.

65. Power of appropriate authority to require additional security or recall loan.

66. Change of security.

67. Mode of repayment of loans.

68. Registered address of borrower.

69. Service of notice on borrower.

70. Priority of charge created by loan made by appropriate authority.

71. Form of mortgage of land.

71A. Rectification of errors in mortgage bonds and amendment of such bonds.

72. Default of payment.

73. Action by appropriate authority where default is made.

74. Appointment of manager to take possession of mortgaged land.

75. Procedure where manager is appointed.

76. Authorisation of sale of mortgaged land.

76A. Appropriate authority may bid for and purchase property mortgaged to him and sold by public auction.

77. Where borrower is dead.

78. Notice of order of appropriate authority to sell land.

79. Notice of sale.

80. Payment before sale.

81. Upset price.

82. Default in respect of one of two loans on the same land.

83. Recovery of expenses and costs incurred by the appropriate authority.

84. Payment of balance of proceeds of sale after deduction of amount due to the appropriate authority.

85. Certificate of sale.

85A. Limitations of actions to invalidate sale.

86. Order for delivery of possession.

87. Cancellation of sale.

88. Resale by appropriate authority.

89. Appropriate authority not precluded from other methods of recovery.

PART X

Exemption from Income Tax and General Provisions

90. Exemption from income tax of income from new houses.

90A. Exemption from income tax of income from certain houses constructed on or after April 1, 1956.

90B. Further exemption from income lax of income from certain houses constructed on or after October 1, 1966.

90C. Exemption from income tax of income from certain places of residence.

90D. Exemption from income tax of certain capital gains arising from the change of ownership of certain houses and the lands on which such houses are situated.

90E. Certain houses to be excluded from wealth for the purpose of computing wealth tax.

91. Power of Commissioner to inspect plans relating to new houses.

91A. Restrictions as to subletting of certain buildings.

91B. Liability to pay compensation for damage caused to any building maintained by the appropriate authority.

91C. Inspection.

91D. Power of Commissioner to call for information.

92. Powers under this Act not to be exercised in contravention of other written law.

93. Certificate from Commissioner.

94. Recovery of moneys due to the State or Commissioner.

94A. Recovery of sums liable to be paid to the Commissioner by persons out of the remuneration of such persons.

95. Signature of documents by Commissioner on behalf of the Government.

96. Declaration of secrecy.

97. Offences.

98. Regulations.

99. Loans and dispositions of land to be for the benefit of citizens of Sri Lanka.

100. Interpretation.

37 of 1954,

22 of 1955,

30 of 1955,

42 of 1958,

36 of 1966,

9 of 1978,

49 of 1981.

AN ACT to make provision for the establishment of a National Housing Fund, for the promotion of housing and building development by the establishment of building societies and by the declaration of bodies of persons as housing bodies and housing companies, for the grant of assistance by government for such development, and for matters connected therewith.

[Date of Commencement: 6th August, 1954]

1. Short title.

This Act may be cited as the National Housing Act.

2. Housing objects.

Each of the objects specified hereunder is hereby declared to be a housing object for the purposes of this Act—

(a) the construction of buildings for residential purposes and for any other purpose connected with or incidental to any of the objects hereinafter specified;

(b) the manufacture, importation or supply of materials required for the construction of such buildings;

(c) the provision of roads, water, electricity, gas, and sewerage;

(d) the administration, management or control of buildings and building schemes;

(e) the provision of amenities for the inhabitants of any area in which any housing scheme has been carried out including transport and other services;

(f) any other prescribed object;

(g) any object reasonably connected with or ancillary to any of the objects specified in paragraphs (a) to (f) of this section;

(h) the development of land for the carrying out of any of the objects hereinbefore specified; and

(i) the grant of assistance for the purpose of enabling the carrying out of any of the objects herein before specified by the lending of money in any manner whatsoever or by the undertaking of guarantees or by promoting, effecting, insuring, guaranteeing, underwriting, participating in the managing and carrying out of any issue, public or private, of Government or other loans or of shares, stock, debentures or debenture stock of any body corporate and by the lending of money for the purpose of any such issue.

3. Housing powers.

Each of the powers specified hereunder is hereby declared to be a housing power for the purposes of this Act—

(a) the power to acquire, or to receive by way of gift or otherwise, any immovable or movable property and to hold, manage, sell, surrender, exchange, lease or otherwise dispose of such property, for the purpose of carrying out any housing object;

(b) the power to borrow money for that purpose;

(c) the power to charge rent or fees for any buildings or any services provided by the carrying out of any housing object; and

(d) the power to enter into such contracts and to make such arrangements or to do all such acts and things as may be necessary or expedient for the purpose of carrying out any housing object,

PART I

National Housing Fund

4. Establishment of National Housing Fund.

A fund to be called the National Housing Fund shall be established for the purposes of this Act.

5. Administration and accounts of National Housing Fund.

(1) The Commissioner shall administer the National Housing Fund. All payments out of the fund shall be made by the Commissioner.

(2) The accounts of the National Housing Fund shall be audited annually by the Auditor-General. The accounts for each year together with a report of the Auditor-General thereon shall be laid before Parliament.

6. Loans for purposes of National Housing Fund.

(1) The Minister may from time to time, under the authority of a resolution of Parliament, raise a loan not exceeding such sum as may be specified in the resolution for the purposes of the National Housing Fund. Such loan shall be raised in such manner and on such terms as may be prescribed.

(2) All sums raised by way of loan by the Minister shall be credited to the National Housing Fund and all sums due as principal and interest on such loans shall be a charge on that fund.

(3) No stamp duty shall be payable in respect of any debenture issued for the purpose of any loan raised by the Minister under subsection (1) or in respect of any instrument of transfer of any such debenture.

7. Payments into and out of the National Housing Fund.

(1) There shall be paid into the National Housing Fund—

(a) all such sums of money as may have been, prior to the appointed date, voted by Parliament, or by resolution of the House of Representatives, for the Ministry for the purposes of housing;

(b) all such sums of money as may, on or after that date, from time to time be voted by Parliament, or by resolution of the House of Representatives, or of the National State Assembly, for the purposes of the fund;

[S 7(1)(b) am by s 2 of Act 36 of 1966.]

(ba) all sums either derived from sales, leases or other transactions effected by the Commissioner, or paid as deposits or damages to the Commissioner, in the exercise, discharge or performance of the powers, functions or duties assigned to or imposed on him by or under this Act;

[S 7(1)(ba) ins by s 2 of Act 36 of 1966.]

(bb) all income derived by the Commissioner from any property made available to him under, or for the purposes of, this Act, or from any property let by him on rent or on such terms as will enable the tenant to become the owner of such property after making a certain number of monthly payments as rent;

[S 7(1)(bb) ins by s 2 of Act 36 of 1966.]

(bc) all income derived by the Commissioner from the operation of any utility service including the supply of electrical energy;

[S 7(1)(bc) ins by s 2 of Act 36 of 1966.]

(bd) all sums otherwise accruing to the Commissioner in the exercise, discharge or performance of the powers, functions or duties assigned to or imposed on him by or under this Act; and

[S 7(1)(bd) ins by s 2 of Act 36 of 1966.]

(c) all such other sums of money, deposits, dividends and profits as are required or stated by this Act to be credited or forfeited to that fund.

(2) There shall be paid out of the National Housing Fund—

(a) all loans granted by the Commissioner under this Act;

(b) all payments, expenses, costs and other sums which are declared by this Act to be a charge on that fund; and

(c) all such sums as are authorised to be so paid out by the Minister.

PART II

Administrative Arrangements

8. Appointment of Commissioner for National Housing.

(1) There shall be appointed, by name or by office, a person to be or to act as the Commissioner for National Housing.

(2) In the exercise, discharge or performance of the powers, functions or duties assigned to or imposed on him under this Act, the Commissioner shall be subject to the general or special directions of the Minister.

9. Appointment of Deputy Commissioners and Assistant Commissioners for National Housing and staff.

(1) There shall be appointed—

(a) such number of persons, by name or by office, to be or to act as Deputy Commissioners for National Housing as may be deemed necessary for the purposes of this Act;

(b) such number of persons, by name or by office, to be or to act as Assistant Commissioners for National Housing as may be deemed so necessary; and

(c) such number of other officers and servants as may be deemed so necessary.

(2) In the exercise, discharge or performance of the powers, functions or duties assigned to or imposed on him under this Act, a Deputy Commissioner or an Assistant Commissioner shall be subject to the general or special directions of the Commissioner.

PART III

Building Societies

10. Formation of building societies.

Any two or more persons associated solely for the purpose of establishing society for the raising by the subscriptions of the members a stock or fund for making advances to members for the carrying out of any housing object referred to in paragraphs (a) to (h) of section 2 may—

(1) by subscribing their names to an instrument of association approved by the Commissioner; and

(2) by registering such instrument with the Commissioner, form an incorporated building society with limited liability.

11. Approval of instrument of association of a building society.

The Commissioner may in his discretion approve or refuse to approve of the instrument of association of any building society. The decision of the Commissioner on an application for the Commissioner's approval of an instrument of association of a building society shall, if an address is specified in the application, be notified in writing to the applicant at that address.

12. Requirements of instrument of association of a building society.

(1) The instrument of association of a building society must state—

(a) the name of the society, with Limited as the last word of the name;

(b) the object of the society;

(c) the powers of the society for the purpose of carrying out its object;

(d) that the liability of its members is limited;

(e) the extent to which the liability of its members is so limited;

(f) the manner in which, and the terms upon which, the stock or fund of the society is to be raised; and

(g) the address of the principal office of the society.

(2) The instrument of association of a building society must, if the society is to be terminated or dissolved on a particular date or in particular circumstances, state that date or those circumstances and the manner in which the society is to be so terminated or dissolved.

(3) The instrument of association of a building society shall make provision—

(a) in respect of all matters for which provision is required to be so made by regulations which are hereby authorised to be made for that purpose under this Act; and

(b) in respect of all such other matters as the Commissioner may deem necessary or expedient for the purpose of enabling it to function as a building society and to carry out its objects and to exercise its powers.

(4) The instrument of association of a building society shall make provision for the management of the business of the society by a Board of Directors.

(5) The powers of a building society as stated in its instrument of association may include the power to hold land and mortgages over land, to make advances to members out of the stock or fund of the society and to borrow money, and such other powers as may be necessary for the purpose of carrying out its object.

13. Registration of instrument of association.

(1) The instrument of association of a building society shall, after it has been approved by the Commissioner, be delivered to the Commissioner who shall retain and register such instrument upon payment of the prescribed fee.

(2) All sums paid as fees under subsection (1) shall be credited to the National Housing Fund.

14. Effect of registration.

(1) On the registration of the instrument of association of a building society, the Commissioner shall certify under his hand that the building society is incorporated and that the society is limited.

(2) From the date of incorporation mentioned in the certificate of incorporation, the subscribers of the instrument of association together with such other persons as may from time to time become members of the building society shall be a body corporate by the name contained in such instrument by which it may sue or be sued, capable forthwith of exercising, discharging and performing all the powers, functions and duties assigned to or imposed on the society by such instrument or by or under this Act, and having perpetual succession (except as otherwise provided in such instrument) and a common seal.

(3) The instrument of association shall, when registered, bind the building society and the members thereof to the same extent as if they had been signed by each member, and contained covenants on the part of each member to observe all the provisions of the instrument.

(4) All money payable by any member to the building society under its instrument of association shall be a debt due from him to the society.

15. Conclusiveness of certificate of incorporation.

A certificate of incorporation given by the Commissioner under this Part in respect of any association shall be conclusive evidence that all the requirements of this Act in respect of registration and of matters precedent or incidental thereto have been complied with, and that the association is a building society authorised to be registered and duly registered under this Act.

16. Alteration of instrument of association.

(1) A building society may alter the provisions of its instrument of association.

(2) The alteration shall not take effect until it has been approved by the Commissioner.

(3) The Commissioner may in his discretion approve or refuse to approve of the alteration. The decision of the Commissioner on an application for the Commissioner's approval of the alteration of the provisions of the instrument of association of a building society shall, if an address is specified in the application, be notified in writing to the applicant at that address.

(4) The Commissioner may of his own motion alter the instrument of association of any building society; and any alteration so made by the Commissioner shall take effect as though it had been made by the society and approved by the Commissioner.

17. Appeals to Minister.

Any person who is aggrieved by the refusal of the Commissioner to approve of the instrument of association of a building society or any alteration thereof may, within thirty days after the date on which notice of such refusal is given to the applicant for such approval, appeal in writing against such refusal to the Minister whose decision on such appeal shall be final and conclusive.

18. Copies of instrument of association to be given to members.

(1) A building society shall, on being so required by any member, send him a copy of its instrument of association upon payment of the prescribed fee. All sums paid as fees under the preceding provisions of this section shall be credited to the fund of the society.

(2) Where any alteration is made in the instrument of association of a building society, every copy of the instrument issued after the alteration has taken effect as hereinbefore provided in this Act shall be in accordance with the alteration.

19. Definition of member of a building society.

(1) The subscribers of the instrument of association of a building society shall be deemed to have agreed to become members of the society, and on its registration shall be entered as members in its register of members which it is hereby required to keep and maintain.

(2) Every other person who agrees to become a member of a building society, and whose name is entered in its register of members, shall be a member of the society.

20. Contracts.

(1) Contracts on behalf of a building society may be made in the prescribed manner.

(2) A contract made according to this section shall be effectual in law and shall bind the society and all other parties thereto and their legal representatives.

(3) A contract made according to this section may be varied or discharged in the same manner in which it is authorised under this section to be made.

21. Bills of exchange and promissory notes.

A bill of exchange or promissory note shall be deemed to have been made, executed, or endorsed on behalf of a building society, if made, executed, or endorsed in the name of, or by or on behalf or on account of, the society by any person or persons duly authorised thereto as herein after provided.

22. Persons authorised to act in behalf of a building society.

No persons other than the directors and persons thereunto expressly authorised by the Board of Directors and acting within the limits of the authority so conferred on them shall have any authority to make, draw, accept or endorse any promissory note, bill of exchange, cheque or order for the payment of money in the name or on behalf of a building society or to enter into any contract so as to impose thereby any liability on the society or otherwise to pledge the credit of the society.

23. Execution of deeds abroad.

The Board of Directors of a building society may, by writing under the seal of the society, empower any person, either generally or in respect of any specific matter, as its attorney, to execute deeds on its behalf at any place not situate in Sri Lanka.

24. Receipts when valid.

A receipt signed by any person authorised in writing by the Board of Directors of a building society to give receipts, shall be an effectual discharge for moneys paid to the society.

25. Company law not to apply to building societies unless so applied by Order of the Minister.

(1) The provisions of the Companies Ordinance1, (other than the provisions of that Ordinance which are made applicable to a building society under this Act), or of any other written law relating to companies, shall not apply to a building society.

(2) Notwithstanding anything in subsection (1), the Minister may, whenever it shall seem to him expedient to do so, by Order published in the Gazette declare, as respects any particular building society or building societies generally, that any such provisions of the Companies Ordinance1 as are not for the time being applicable to such society or societies or the provisions of any other written law relating to companies, shall apply to such society or societies, and accordingly so long as that Order remains in force the provisions so applied shall mutatis mutandis apply in the case of such society or societies, as the case may be, in the manner and to the same extent as they apply in the case of a company.

25A. Power of Commissioner to direct the Board of Directors of a building society to summon a meeting of that society.

(1) The Commissioner may, by order in writing, direct the Board of Directors of a building society to summon a meeting of that society for the purpose of discussing and deciding such matters relating to that society as he may specify in such order. Such meeting shall be held at such time and place as the Commissioner may determine.

(2) The Commissioner or any person authorised by him in that behalf may preside at any meeting of a building society summoned under subsection (1) and may speak on any matter to be decided at such meeting but he shall not be entitled to vote upon any such matter.

(3) The preceding provisions of this section shall have effect notwithstanding anything in the instrument of association of a building society.

[S 25A ins by s 3 of Act 36 of 1966.]

25B. Power of Commissioner to call for information and to inspect books, registers and other documents of a building society.

(1) The Commissioner may, by written notice, direct any building society—

(a) to furnish before a date specified in the notice such information relating to that society as the Commissioner may require for the purposes of this Act; or

(b) to cause to be produced for inspection before a date specified in the notice any book, register or other document in the possession of that society.

(2) If default is made in complying with any direction given to a building society by the Commissioner under subsection (1), every member of the Board of Directors of that society shall be guilty of an offence:

Provided that no such member shall be guilty of an offence under this section if he proves that such offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

(3) Every person who is guilty of an offence under this section shall, on conviction after summary trial before a Magistrate, be liable to a fine not exceeding five hundred rupees or to imprisonment of either description for a period not exceeding six months or to both such fine and imprisonment.

[S 25B ins by s 3 of Act 36 of 1966.]

25C. Power of Commissioner to inquire into the affairs of a building society.

(1) The Commissioner may, of his own motion, and shall, on the application of a majority of the members of the Board of Directors of a building society or of not less than one-third of the members of a building society, hold an inquiry, or direct by order in writing an officer (hereafter in this section referred to as an "authorised officer”) of the Department of National Housing to hold an inquiry, into the affairs of such society.

(2) For the purposes of an inquiry under subsection (1), the Commissioner or an authorised officer may—

(a) summon as a witness any person who, in the opinion of the Commissioner or such authorised officer, can give any material information;

(b) examine on oath or affirmation any person who has been summoned under paragraph (a) of this subsection; and

(c) direct any person to furnish before a specified date such information or document as the Commissioner or such authorised officer may require.

(3) Every person who—

(a) on being summoned as a witness under subsection (2) makes default in attending; or

(b) being in attendance as a witness summoned under subsection (2), refuses to take any oath or affirmation which may be administered to him under that subsection or to answer any question which may be put to him by the officer examining him under that subsection; or

(c) on being examined under subsection (2), makes any statement which is false and which he knows to be false; or

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